In a Washington Post editorial on the topic of shifting teacher pension costs to local employers, the paper lays out some narrative on the path that created this problem, correctly noting the 2006 enhancement to the pension system was a substantial factor leading to today’s funding concerns.
From the Post editorial’s narrative:
When state lawmakers enacted a big increase in teachers’ pensions four years ago — an increase that freighted Annapolis with huge obligations to cover benefits negotiated by local school systems — the move was pushed by Democrats, signed by a Republican governor, cheered by localities and hailed by then-Lt. Gov. Michael Steele, now the national GOP party chairman.
However, on the way to their conclusion on the topic, they offer some perplexing thoughts on the incentives at work:
More to the point, an arrangement whereby counties negotiate retirement benefits and then hand the bill to the state constitutes an incentive for irresponsibility. If the counties have no skin in the game, why should they be stingy with taxpayers’ money? Unsurprisingly, few states have a similar arrangement.
MACo believes the writer is mistaken, in the selection above, on two counts:
#1 – Counties do not negotiate with teachers. Under Maryland law, it’s the local school boards who negotiate with teachers unions, and it’s those bodies who resolve issues like salary adjustments. The county role is to provide the resources, directed to a short list of broad categories, to bring about an eventual school budget. But county governments do not have any seat at the negotiating table.
#2 – Neither the counties nor the school boards “negotiate retirement benefits and then hand the bill to the state.” Pension benefits are not on the table in local negotiations — the benefits, eligibility, and all related policies are all a function of state law and in the control of the General Assembly and the State Retirement and Pension System. Suggesting that counties, or even school boards, are “giving away the store” in pension benefits with no consequence is simply inaccurate.
Based on a conversation MACo had with the Washington Post, it provided the following correction.
Correction to This Article
An earlier version of this editorial left the erroneous impression that counties negotiate retirement benefits with teachers. In fact, teachers’ pensions are determined by their salaries, which are negotiated with county school systems.